BIR Ruling

August 6, 1976 Mr. Suren G. Daswani Daswani Enterprises Ltd. 909 Manhattan Bldg. 413 Nueva St.,Binondo Manila S i r : This refers to your letter dated July 5, 1976 requesting our opinion as to whether you may be allowed to import the following items tax free: aisa dc 1. Ball point pens 2. Bar sets 3. Air Purifiers, with fillings 4. Telephone Index It is represented that the above-mentioned items are to be sold to big new hotels under construction; that these items will be painted with the logo of the Hotels and will not be sold to the general public. In reply, I have the honor to inform you that Section 8 of Presidential Decree No. 535 provides as follows: "Sec. 8. Incentives available to a registered Tourism Enterprise "xxx xxx xxx "(e) Importations of machinery and equipment and spare parts shipped with such equipment shall not be subject to tariff duties and compensating tax within seven years from the date of registration with the authority subject to the other provisions in Section 7(d) of Republic Act No. 5186. "xxx xxx xxx." It is clear that the items above-mentioned which you seek to import tax-free are not covered by the tax incentive and even if it were so, the machinery, equipment or spare parts must be covered by shipping documents in the name of the registered enterprise to whom the shipment will be delivered direct by customs authorities. (See Section 7(d) of Republic Act No. 5186). Accordingly, your importations of the aforesaid articles to be sold to owners of hotels under construction are subject to the corresponding advance sales tax. cdi Very truly yours, EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-1456-040-3